In the huge international timeshare market dominated by companies like Hilton and Marriott, you can forget many smaller timeshare resorts still exist. Some of these resorts have had timeshares passed over generations. But when these resorts can no longer make money, they close. What happens to an owner facing a timeshare shutdown as a result of one of these closures?
Timeshare resorts usually close because they have run out of money or otherwise can’t make a profit. If you’re unlucky enough to be an owner holding a timeshare at one of these resorts, it’s likely that what you have isn’t worth much. But that doesn’t mean that you don’t have options.
In this article, we’ll look at what your options might be in the event of a timeshare shutdown. First, we’ll consider what happens to your timeshare contract when the resort closes. Then, we’ll discuss possible legal rights that might apply to your case, and whether you, as a timeshare owner, should expect any kind of compensation from the resort. Finally, we’ll take a look at your potential exit strategies with Centerstone Group, today’s leading timeshare exit company.
What Happens to Your Timeshare Contract If the Resort Goes Out of Business?
There is no one answer to the question of what happens to your contract if the resort goes out of business, except for a quite general one: You must check your timeshare contract. As the foundational document for your timeshare ownership, it will have the first word on what happens to your rights and obligations. Let’s look at some of the more common possibilities below.
1. Your Contract Is Assigned to a New Company
The resort (and its contracts) might have been purchased by a new company. In that case, your contract might be assigned to the new management company. This means that your contract would be with a completely new timeshare company that you didn’t originally sign with. While that may not seem fair, it’s important to look at your timeshare purchase agreement and see what it allows with regard to assignment. Chances are, you have already agreed to this kind of arrangement.
Another possibility is, if your resort declared bankruptcy, your contract might be assigned by the bankruptcy court as an asset to a new company. (Bankruptcy of a resort isn’t an unusual occurrence in places like Orlando, Florida, where The Gardens timeshare resort was forced to declare bankruptcy in 2017.)
In cases like these, a new company might come in and start running your resort. It’s likely that they would also want to make upgrades or repairs and might charge you special assessments to pay for them.
If your contract is assigned to a new company, you may in fact get access to new properties, as when Bluegreen Vacations was acquired by Hilton. Though that might sound good, keep in mind that you’ll probably pay much more in annual maintenance fees and other costs, subject to the policies of the new timeshare company.
2. The Company Offers a Small “Buyout” or Wants to Take Your Interest Back Without Paying You at All
A timeshare resort might also offer to buy your timeshare interest back (also known as a “deed-back”) in exchange for ending your contract. Contrary to what you might have heard at your timeshare sales presentation, though, don’t expect a lot of money, if this option is even offered at all.
In 2024, a timeshare resort in Myrtle Beach, South Carolina, closed its doors. The Beach House Golf and Racquet Club, which had been operating for nearly half a century, simply did not have the money to pay its bills. According to local news station WMBF News, the sudden closure left many owners unsure of how to deal with the situation.
The Beach House owners were offered a buyout for their interests of $250. Needless to say, many felt that was far too little and chose not to sell. Amazingly, though, getting paid $250 for a timeshare is far more than the average timeshare owner could expect in a deed-back situation, where developers usually take back interests without paying owners at all.
It should be stressed, though, that a buyout offer like this is quite rare, as is any kind of deed-back situation being accepted by a timeshare company. They typically do not entertain these possibilities without some level of pressure being exerted on them.
What Legal Rights Do Timeshare Owners Have in the Event of a Timeshare Shutdown?
Unfortunately, in most cases you won’t have many rights to challenge the timeshare company when it closes the resort. Once again, the first place to look regarding your legal rights is your timeshare agreement. The contract will tell you if you have the right to object to an assignment of the contract (probably not) or whether you are entitled to a buyout (again, probably not).
But you may find the actions of the company closing down your resort is a breach of the contract. In that case, a timeshare attorney or law firm would be helpful for you to obtain legal advice about what to do next.
In general, though, there are some actions you can take to help you decide what to do next:
Read the contract thoroughly: Talk to a lawyer if you need to, but knowing the agreement backward and forward is the single best step you can take to help yourself.
Know your rights regarding payment of fees: Does the contract tie payment of fees or assessments only to the resort that has closed? If so, do not sign any further documents, as the company may be trying to re-obligate you to pay annual maintenance fees on a different resort.
Call the timeshare company and speak to a person: While emails and online chats can be good documentation for talking with the company, finding a phone number and speaking with a live person about your options can often get you further than written communication. Make sure you take copious notes, with times, dates, and the names of people with whom you have spoken.
Ask for a deed-back or refund: You probably won’t get it just by asking, but that’s not the point of the question. You want to see what the response is and how you are treated. This information will tell you a lot about how much you will have to fight, and it could be a gold mine of information for an exit company or lawyer helping you later.
Consult with a timeshare exit specialist: Exit companies like Centerstone Group have evaluated thousands of timeshare contracts and can figure out your situation and the best plan of action. Talking with an expert is the single best move you can make to protect yourself and ensure you get the best possible result.
Can You Get a Refund or Compensation for a Closed Timeshare?
The answer to whether you can get a refund or compensation for a closed timeshare is almost certainly no. The sad fact is, timeshares are a terrible investment and have almost no value on the real estate resale market. Interests at a closed-down timeshare resort would be worth even less than standard timeshares, which are being given away on sites like eBay and Craigslist by desperate owners trying to unload them on other people.
The answer might change if you were defrauded or somehow tricked into getting your timeshare, in which case you might be able to get some compensation. In that case, obtaining legal advice from an attorney would be the best move.
Get Clarity From Experts About Your Timeshare Shutdown
A timeshare shutdown not only wrecks your vacation plans; it can destroy your peace of mind and finances. You need to get out from under the weight of fees and costs for a resort that might not even be operating, and you should do it as quickly and efficiently as possible.
As the top timeshare exit group in the world, Centerstone Group has decades of experience in the timeshare industry and has successfully helped thousands of owners exit vacation ownership. We are an A+-rated business with the Better Business Bureau (BBB), where we also have a 4.78-out-of-5-star rating from our satisfied clients.
If your timeshare resort has shut down, don’t let the timeshare company tell you what to do. Contact us today for a free consultation and case evaluation.
In the huge international timeshare market dominated by companies like Hilton and Marriott, you can forget many smaller timeshare resorts still exist. Some of these resorts have had timeshares passed over generations. But when these resorts can no longer make money, they close. What happens to an owner facing a timeshare shutdown as a result of one of these closures?
Timeshare resorts usually close because they have run out of money or otherwise can’t make a profit. If you’re unlucky enough to be an owner holding a timeshare at one of these resorts, it’s likely that what you have isn’t worth much. But that doesn’t mean that you don’t have options.
In this article, we’ll look at what your options might be in the event of a timeshare shutdown. First, we’ll consider what happens to your timeshare contract when the resort closes. Then, we’ll discuss possible legal rights that might apply to your case, and whether you, as a timeshare owner, should expect any kind of compensation from the resort. Finally, we’ll take a look at your potential exit strategies with Centerstone Group, today’s leading timeshare exit company.
What Happens to Your Timeshare Contract If the Resort Goes Out of Business?
There is no one answer to the question of what happens to your contract if the resort goes out of business, except for a quite general one: You must check your timeshare contract. As the foundational document for your timeshare ownership, it will have the first word on what happens to your rights and obligations. Let’s look at some of the more common possibilities below.
1. Your Contract Is Assigned to a New Company
The resort (and its contracts) might have been purchased by a new company. In that case, your contract might be assigned to the new management company. This means that your contract would be with a completely new timeshare company that you didn’t originally sign with. While that may not seem fair, it’s important to look at your timeshare purchase agreement and see what it allows with regard to assignment. Chances are, you have already agreed to this kind of arrangement.
Another possibility is, if your resort declared bankruptcy, your contract might be assigned by the bankruptcy court as an asset to a new company. (Bankruptcy of a resort isn’t an unusual occurrence in places like Orlando, Florida, where The Gardens timeshare resort was forced to declare bankruptcy in 2017.)
In cases like these, a new company might come in and start running your resort. It’s likely that they would also want to make upgrades or repairs and might charge you special assessments to pay for them.
If your contract is assigned to a new company, you may in fact get access to new properties, as when Bluegreen Vacations was acquired by Hilton. Though that might sound good, keep in mind that you’ll probably pay much more in annual maintenance fees and other costs, subject to the policies of the new timeshare company.
2. The Company Offers a Small “Buyout” or Wants to Take Your Interest Back Without Paying You at All
A timeshare resort might also offer to buy your timeshare interest back (also known as a “deed-back”) in exchange for ending your contract. Contrary to what you might have heard at your timeshare sales presentation, though, don’t expect a lot of money, if this option is even offered at all.
In 2024, a timeshare resort in Myrtle Beach, South Carolina, closed its doors. The Beach House Golf and Racquet Club, which had been operating for nearly half a century, simply did not have the money to pay its bills. According to local news station WMBF News, the sudden closure left many owners unsure of how to deal with the situation.
The Beach House owners were offered a buyout for their interests of $250. Needless to say, many felt that was far too little and chose not to sell. Amazingly, though, getting paid $250 for a timeshare is far more than the average timeshare owner could expect in a deed-back situation, where developers usually take back interests without paying owners at all.
It should be stressed, though, that a buyout offer like this is quite rare, as is any kind of deed-back situation being accepted by a timeshare company. They typically do not entertain these possibilities without some level of pressure being exerted on them.
What Legal Rights Do Timeshare Owners Have in the Event of a Timeshare Shutdown?
Unfortunately, in most cases you won’t have many rights to challenge the timeshare company when it closes the resort. Once again, the first place to look regarding your legal rights is your timeshare agreement. The contract will tell you if you have the right to object to an assignment of the contract (probably not) or whether you are entitled to a buyout (again, probably not).
But you may find the actions of the company closing down your resort is a breach of the contract. In that case, a timeshare attorney or law firm would be helpful for you to obtain legal advice about what to do next.
In general, though, there are some actions you can take to help you decide what to do next:
Can You Get a Refund or Compensation for a Closed Timeshare?
The answer to whether you can get a refund or compensation for a closed timeshare is almost certainly no. The sad fact is, timeshares are a terrible investment and have almost no value on the real estate resale market. Interests at a closed-down timeshare resort would be worth even less than standard timeshares, which are being given away on sites like eBay and Craigslist by desperate owners trying to unload them on other people.
The answer might change if you were defrauded or somehow tricked into getting your timeshare, in which case you might be able to get some compensation. In that case, obtaining legal advice from an attorney would be the best move.
Get Clarity From Experts About Your Timeshare Shutdown
A timeshare shutdown not only wrecks your vacation plans; it can destroy your peace of mind and finances. You need to get out from under the weight of fees and costs for a resort that might not even be operating, and you should do it as quickly and efficiently as possible.
As the top timeshare exit group in the world, Centerstone Group has decades of experience in the timeshare industry and has successfully helped thousands of owners exit vacation ownership. We are an A+-rated business with the Better Business Bureau (BBB), where we also have a 4.78-out-of-5-star rating from our satisfied clients.
If your timeshare resort has shut down, don’t let the timeshare company tell you what to do. Contact us today for a free consultation and case evaluation.